Nat cat forecast to become biggest risk in near future
Natural catastrophes are expected to become the insurance market’s biggest risk over the next five years, overtaking cyber incidents and emerging technologies.
For now, however, cyber remains the top concern, cited by 55% of respondents in a survey by Munich Re Specialty and the Insurance Information Institute (Triple-I). Business interruption and new technologies followed at 45%, with natural catastrophes at 42%.
The RiskScan survey highlights the growing interconnectedness of risks, with cyber, business interruption and technology exposures increasingly linked.
“The data shows economic conditions are increasingly acting as a multiplier of insurance risk, affecting affordability, claims severity, capital allocation and long-term market stability,” said Triple-I chief economist and data scientist Michel Léonard.
Inflation was identified as the leading macroeconomic concern (54%), ahead of economic decline (46%) and the cost of property insurance (34%). According to the report, economic pressures are amplifying catastrophe, cyber and liability risks through higher replacement costs, legal expenses and capital constraints.
“Inflation, higher replacement costs and capital pressure are forcing us to reassess severity assumptions and the durability of risk appetite across every line,” said Cathy Smith, chief underwriting officer at Munich Re Specialty.
Cyber, economic pressures and AI ranked among the top concerns across all market segments. Meanwhile, secondary catastrophe perils such as floods, severe storms, winter weather and wildfires are increasingly viewed as frequent, high-impact risks that challenge traditional assumptions around catastrophe exposure and diversification.
The survey also found persistent protection gaps in flood and cyber insurance, despite growing awareness. Rising P&C insurance costs were attributed to inflation, increasing catastrophe losses and escalating legal costs.
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